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LIRA

 

Locked-In Retirement Account (LIRA): Take Control of Your Pension for a Secure Future

A Locked-In Retirement Account (LIRA) is a specialized registered pension plan designed to hold your pension funds from a previous employer. While you can no longer contribute to your LIRA, it allows you full control over your investment decisions, ensuring your retirement savings align with your personal financial goals.

Why Open a LIRA?

  • Take Control of Your Investments
    With a LIRA, you dictate your investment strategy, allowing you to tailor it to your specific retirement objectives, rather than following the preferences of a previous employer’s pension plan.

  • Tax-Deferred Growth
    Your assets within the LIRA continue to grow tax-deferred, allowing your investments to compound over time, with taxes only due when you transfer the funds to a Life Income Fund (LIF) or annuity for withdrawals.

  • Funds Are Securely Locked
    The funds in your LIRA are “locked in,” meaning they are protected from early withdrawals. This ensures that your retirement savings are preserved for when you truly need them 

  • How a LIRA Works

    1. Start with a Migration Plan
      If you have pension funds from a former employer, an advisor can help you transfer these funds into a LIRA. Together, you will develop a strategy that aligns with your retirement goals, taking into account your available funds, timeline, and risk tolerance.

    2. Develop Your Investment Strategy
      Unlike a traditional pension plan, a LIRA allows you to actively manage your investments. While no new contributions can be made, you have the flexibility to adjust your portfolio to suit your evolving financial needs.

    3. Let Your Money Grow
      Early withdrawals from a LIRA are generally not permitted, which helps you stay focused on your long-term retirement plan. Your investments grow tax-deferred, enabling your savings to compound and accumulate until you’re ready to access them.

    4. Prepare for Retirement Income
      Once you’re ready to begin withdrawing from your LIRA, you must transfer the funds into a Life Income Fund (LIF) or annuity to start receiving payments. This transfer must be completed by the end of the year in which you turn 71.

Tax-Deferred Growth

Your investment grows without being taxed until you withdraw the funds, allowing for greater compound growth over time.

Investment Control

You have full control over how your LIRA funds are invested, allowing you to align your portfolio with your retirement goals.

Our benefits

Benefits of a Locked-In Retirement Account (LIRA)
Secure Future
Tailored Investment Strategy
Compounding Tax-Deferred Earnings
Employer Contributions Transferred

Can I withdraw money from my LIRA at any time?

No, LIRA funds are locked in and cannot be withdrawn directly except under specific circumstances. You must transfer the funds into a Life Income Fund (LIF) or annuity to access them.

How do I transfer my pension into a LIRA?

To transfer your pension from a previous employer to a LIRA, consult with an advisor who can assist with the transfer process, ensuring that it aligns with your retirement goals.

What happens to my LIRA when I retire?

When you retire, you can transfer the funds in your LIRA to a LIF or annuity to begin receiving retirement income. This must be done before the end of the year in which you turn 71.